THE PRESIDENT: I want to thank Secretary Bodman for welcoming us here at
the Energy Department; Secretary Norton. We've just had a full briefing on
what we know thus far about the effects of Hurricane Rita on the energy
situation in the Gulf of Mexico.

A lot of our production comes from the Gulf, and when you have a Hurricane
Katrina followed by a Hurricane Rita, it's natural, unfortunately, that
it's going to affect supply. There's about 1.56 million barrels of oil
that is shut in. And before Rita, just to put that in perspective, that
was approximately 880,000 barrels a day that were shut in due to Katrina.
So that when you really look on a map you have, if you follow the path of
Katrina and the path of Rita, it pretty much covers a lot of production in
the Gulf of Mexico.

Right now the producing companies are assessing damage to the platforms and
rigs. It's important for our people to know that we understand the
situation and that we're willing to use the Strategic Petroleum Reserve to
mitigate any shortfalls in crude oil that could affect our consumers. I've
instructed the Secretary of Energy to be mindful once again about the
effects of the SPRO, and how it can help settle price. He did a fine job
after Katrina, and we're paying close attention to the markets as we speak.

Secondly, gasoline prices, obviously, are on our mind, and so we've watched
very carefully the assessments done on the refining -- the refineries there
on the Gulf Coast. There are a lot of -- a lot of gasoline refineries in
the Houston area, in the Beaumont area, in the Port Arthur area, as well as
Lake Charles, and the Louisiana area. There was about 5.4 million barrels
per day that were shut in as a result of Rita and Katrina. A million of it
is back up already, and we expect another 1.8 million barrels a day to get
back on line relatively quickly because the storm missed a lot of refining
capacity down the Texas coast.

We don't know yet about 1.7 million barrels a day that were located right
in the path of Rita. And the Secretary has got his people in contact with
the energy companies to find out exactly what we have to deal with. About
900,000 barrels a day are still shutdown as a result of Katrina. For those
of you who went with me to the Chevron plant in Pascagoula, Mississippi,
you might remember the size of that facility and the scope of the damage it
had sustained. They're working hard to bring these plants back up.

The other thing that's going to affect the ability for people to get
gasoline is, of course, the pipelines. In other words, you manufacture the
gasoline in a refinery and you have to ship it across the country. There's
three of the four major gasoline pipelines -- three of the four pipelines
in the affected area are major gasoline pipelines that supply the Midwest
and the East Coast. The Plantation Pipeline, which is an East Coast
pipeline, is at 100 percent capacity. That's one of the real success
stories of this storm. In other words, it didn't go down at all.

Colonial, which sends gasoline up to the Midwest, is at 52 percent
capacity. It will soon be about 70 percent, and should be at 100 percent
by the end of the week. The Explorer in the Midwest, sending gas to the
Midwest, is at 67 percent capacity, should be at 100 percent next week.
The Capline, which sends gasoline to the Midwest, as well -- it's a major
crude pipeline, by the way, that sends crude to be refined in the Midwest
-- will be at about 75 percent capacity now, and obviously they're going to
do everything they can to get it up to capacity.

My point is, is that the storm affected the ability to get gasoline to
markets. I know the governors of Florida and Georgia have done some
creative things to try to anticipate what will be a temporary problem.
Governor Perdue of Georgia I thought did a -- showed some leadership by
saying we've got to -- anticipating a problem, here's what we need to do to
correct it.

There's going to be some -- by the way, and here's what we have done and
will continue to do. We have suspended certain EPA winter blend rules so
that it makes it easier to import gasoline from overseas. In other words,
there's a supply of gasoline in Europe, and by suspending these rules, it's
a lot more likely to be able to get gasoline into our markets. And so
while there's a shortfall because of down refining capacity, we will work
with -- we have instructed EPA to leave the rules in place, or to suspend
the rules that were in place, keep the suspension in place, which would
make it easier to increase supply, and continue to get supply of gasoline
here. And that's important for our consumers to know.

In Houston, the challenge in Houston, as I understand it, is to get drivers
and trucks into Houston so they can deliver gasoline to the retailers. And
the Secretary is working with the local authorities there to help do
anything we can to help get that done so that people in that big city will
be able to get some gasoline. Beaumont and Port Arthur are still under
assessment, we're not sure yet the full extent of the damage.
I'll be going down there in the area tomorrow, and by then there will be a
pretty clear assessment. I look forward to dealing with local -- talking
to local leaders about what -- the situation and the problems they face.

Let me repeat, we'll use the Strategic Petroleum Reserve to help refineries
with crude oil. We will continue the waivers to allow the winter blends of
fuel to be used throughout the country. We will continue to waiver that --
to allow broader use of diesel fuel. Because we understand there's been a
disruption in supply and we want to make sure that we do everything we can
to help with the supply disruption.

The Homeland Security waived the Jones Act on restrictions on fuel
transportation. We're allowing foreign flag ships to temporarily transport
fuel from one U.S. port to another. That's going to be important for
expediting supply to deal with bottlenecks. We will continue that waiver.
The Treasury and IRS announced that dyed diesel fuel for off-road use would
be allowed on on-road use without penalty. In other words, we're taking
action to help deal with the shortfall caused by Katrina and Rita.

Two other points I want to make is, one, we can all pitch in by using -- by
being better conservers of energy. I mean, people just need to recognize
that the storms have caused disruption and that if they're able to maybe
not drive when they -- on a trip that's not essential, that would helpful.
The federal government can help, and I've directed the federal agencies
nationwide -- and here's some ways we can help. We can curtail
nonessential travel. If it makes sense for the citizen out there to
curtail nonessential travel, it darn sure makes sense for federal
employees. We can encourage employees to carpool or use mass transit. And
we can shift peak electricity use to off-peak hours. There's ways for the
federal government to lead when it comes to conservation.

And, finally, these storms show that we need additional capacity in -- we
need additional refining capacity, for example, to be able to meet the
needs of the American people. The storms have shown how fragile the
balance is between supply and demand in America. I've often said one of
the worst problems we have is that we're dependent on foreign sources of
crude oil, and we are. But it's clear, as well, that we're also really
dependent on the capacity of our country to refine product, and we need
more refining capacity. And I look forward to working with Congress, as we
analyze the energy situation, to expedite the capacity of our refiners to
expand and/or build new refineries.

It is clear that when you're dependent upon natural gas and/or hydrocarbons
to fuel your economy and that supply gets disrupted, we need alternative
sources of energy. And that's why I believe so strongly in nuclear power.
And so we've got a chance, once again, to assess where we are as a country
when it comes to energy and do something about it. And I look forward to
working with Congress to do just that.

I'll be glad to answer a couple of questions. Nedra.

Q Thank you, Mr. President. I want to ask you about a different result
of these storms, and that is the racial divide that's been exposed in this
country. Blacks and whites feel very differently about what happened. We
all recognize that the response to Rita was much better than the response
to Katrina, but there are some strong feelings in the black community that
that difference had a racial component to it, that the white, you know,
rural residents got taken care of better than the black urban residents
did. How do you respond to that?

THE PRESIDENT: Well, I think about Houston, my old hometown of Houston,
which is an incredibly diverse city. And we had what looked like a
category five hurricane headed right for Houston, and the federal, state
and local officials worked together to warn the citizens of the impending
storm. The message wasn't sent to one group of people; it was sent to the
entire city. I mean, Texas is a diverse state. The rural part of Texas
you're talking about has got a significant African American component to
it. But I can assure you that the response efforts, and now the recovery
efforts, are aimed at -- aimed at saving everybody. And the response was
directed toward everybody.

I think that what a lot of Americans saw was a -- some poverty that they
had never imagined before. And we need to address that, whether it be
rural or urban. And I have done that as the President. I have said that
education systems that simply shuffle children through are -- can be
discriminatory in nature. And, therefore, we've got to have high standards
and high expectations and focus money on Title I children to teach -- so
that they -- so that children can learn to read. And we're beginning to
make progress.

I have said that ownership is a way to counter poverty and being stuck in
impoverished situations, and so homeownership is up. And business
ownership is up amongst minorities. I have said that the faith-based
programs are more likely able to address some of the hopelessness of
people, and therefore have empowered faith-based programs to interface with
people. We've promoted mentoring programs for children whose parents might
be in prison, as a way to help provide hope for people.

But this is an issue that this country must continue to address. Poverty
is an issue that's an important issue. And poverty exists in New Orleans,
Louisiana, and it exists in rural Texas, and it needs to be addressed in a
significant way.

Toby.

Q Mr. President, now that Judge Roberts is heading for confirmation, how
close are you to choosing your second nominee for the Supreme Court? And
how much of a factor is diversity going to be?

THE PRESIDENT: First of all, I will -- I'm cautiously optimistic about
Judge Roberts' vote in the Senate. I will -- he's done a fantastic job of
showing the Senate and the American people he's not only a brilliant
person, but a decent person with a great heart. And so I await
confirmation and I hope it goes well. It looks like it might.

Your question indicated that it looked like it was headed in the right
direction. I will withhold judgment until the Senate exercises their
consent part of the advice and consent relationship with the White House.

I have interviewed people in the past, and thought about people from all
walks of life. And I will put the person in to do the job. But I am
mindful that diversity is one of the strengths of the country.

Any other questions? Yes.

Q Thank you. In suggesting that the Department of Defense might become
the first responder in catastrophic disasters, are you not conceding that
the Department of Homeland Security is not up to the task?

THE PRESIDENT: Oh, no, no let me -- I appreciate you asking that question.
One of the reasons I went out to NORTHCOM was to see the operations there,
to look at how well organized NORTHCOM is, to listen to them talk about
lessons learned from a major storm like Katrina, to think about ways for
our country to properly respond to a catastrophic event, whether it be a
natural catastrophic event or perhaps a terrorist attack.

And what I want the discussion to -- I want there to be a robust discussion
about the best way for the federal government, in certain extreme
circumstances, to be able to rally assets for the good of the people. I
don't want to prejudge the Congress's discussion on this issue, because it
may require change of law.

But I do want them to think about a circumstance that requires a lot of
planning and a lot of assets immediately on the scene in order to
stabilize. And so what I was speculating about was a scenario which would
require federal assets to stabilize the situation, primarily DOD assets --
DOD assets, and then hand back over to Department of Homeland Security, for
example. And I think it's very important for us as we look at the lessons
of Katrina to think about other scenarios that might require a well-planned
significant federal response right off the bat to provide stability.
That's what I was talking about.

Q Mr. President, you had mentioned refining capacity. I'd like to ask
you about an offer from the Kuwaiti oil minister, who has said that he is
willing to offer to build a capacity -- a refining capacity in the U.S.; it
would be the first time in about 30 years. Says he's asked for White House
assistance -- assistance -- assistance getting permits and fed support and
so forth. What do you think of a proposal like that?

THE PRESIDENT: I am for increasing supply, because I understand when the
more supply there is of a product, that will take pressure off of price. I
haven't seen this specific proposal. But I've also talked to U.S. refiners
who have said, we'd like to expand onsite, but the amount of paperwork
necessary to do so is staggering. The issue of new source review, for
example, is one that we've reviewed and said that, for the sake of, in this
case, the expeditious expansion -- and wise and careful expansion -- of
refining capacity, we ought to look at those rules and regulations. And
yet we're back in court.

And so I think if you take a good look at what it means to build a
refinery, or expand a refinery, you'll find there's a lot of regulations
and paperwork that are required, thereby delaying the capacity for more
product to come on to the market and discouraging people from doing --
building refineries. That's why we haven't had one since 1970-something.

So it's an interesting offer, and we'll, of course, look at it. The first
thing we need to look at is how to encourage people to do just that without
getting -- without all kinds of time being taken up through the
bureaucratic hurdles.

Okay, thank you -- yes, ma'am.

Q Some have called for the continued idea of the reconstruction czar.
Has your administration reconsidered having someone in charge, a federal
person of the --

THE PRESIDENT: Yes, "reconsidered" means we've ruled it out. I never
have; I'm considering. "Reconsidered" means at some point in time I
decided not to have that. But I think the idea of having a federal
interface with local folks might be -- might be a good idea.

First things first, however. Remember in my speech in New Orleans, I
strongly said that this reconstruction vision ought to be a local vision.
And if you might remember, the other day I went down to Mississippi and was
with Governor Barbour and Jim Barksdale -- he was the founder of Netscape,
a local business guy who has put together a group of distinguished
citizenry to help plan what south Mississippi ought to look like. And
we'll see what else emerges -- comes from that idea in Louisiana.

But the idea is once these groups get up and running, they're going to have
to interface with the federal government. And so I'm considering how best
to balance the need for local vision and federal involvement.

Now, there's going to be a lot of federal involvement because we're going
to spend money -- wisely, I might add. And so it's an idea that I'm still
considering. And I want to watch -- because the reason why I'm comfortable
about saying "still considering" is because we're still recovering. And
we've got a lot of work to do to recover. I mean, when I go down to
Mississippi, I appreciate the vision that they're beginning to think about,
but my first priority was to help those local folks remove debris. And
then the next question is, what do we do with the debris once it's removed.
And there's a lot of immediate needs.

If I were to go down to New Orleans today -- I'm not -- if I were, I'd be
talking to the Mayor, I'd be interested in the vision -- but I'd be more
interested in how we're going to get that water out of the 9th ward. And
so I'm now interested -- the next step of the recovery is how to get
temporary housing in place to get workers back so that jobs can get cranked
up again.

In terms of Texas, when it comes to where my thought process is now, I'm
interested in getting electricity to people, and gasoline to people. But
the vision element of reconstruction is just beginning, and there may be a
need for an interface with a particular person to help make sure that the
vision becomes reality. It's a long answer to a short question.